Life cycle of an invoice

The life cycle of an invoice refers to the stages that an invoice goes through from its creation to final payment. It involves several steps, from the initial agreement between buyer and seller to the closure of the transaction once payment is made. This guide helps you understand the typical life cycle of an invoice in Zenskar.

Life cycle of an invoice

To view an invoice:

In the side panel, navigate to Invoices.
Click on the invoice you would like to scrutinize.

Draft invoice

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Definition
A newly generated invoice is considered a draft invoice: a preliminary version of an invoice open for modifications.

Properties of a draft invoice

A draft invoice can be:

edited by clicking on the EDIT button.
deleted by clicking on the DELETE INVOICE button.
emailed to your customer for feedback by clicking on the EMAIL INVOICE button.

Approved

Once you have verified all the details of a draft invoice, it can be approved by clicking on the Approve invoice button.
Alternatively, you can approve and email your customer by clicking on the APPROVE & EMAIL button.
You can approve invoices in bulk. Approved invoices are sent to your customers and relevant accounting entries are created in your chart of accounts.
You can navigate to Accounting > Balances to understand how the approval event affects the assets and customer wallet.

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Note
Unlike a draft invoice, an approved invoice cannot be edited. One approved, any adjustments to the invoice can be made only by issuing credit notes. Therefore, it is important to scrutinize the draft invoice before approving it.

Fig. 2: An approved invoice — Fig. 3: Structure of an approved invoice.

Wallet balance

Customers may have a wallet balance associated with their account.
This balance is used during invoice generation to adjust the due amount.

The wallet balance used for invoice generation will appear on the invoice as Applied Balance. Wallet balance is adjusted only on invoice approval.

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Note
If your customer, ACME corporation, has a $50 wallet balance and there are several draft invoices, each invoice will contain an Applied Balance line item of $50. However, whichever draft invoice is approved first will use the wallet balance to adjust the due amount. The wallet balance will be adjusted accordingly.

Paid/Partially Paid

Your customer can make a partial payment against an approved invoice. This will turn an approved invoice into a partially paid invoice.

Fig. 3: A partially-paid invoice — Fig. 4: A partially-paid invoice.

When a full payment is made against an approved invoice, the invoice will become a paid invoice. An approved invoice can become a paid invoice in the following ways:

customer makes multiple partial payments amounting to the total invoice amount.
customer makes one full payment.

Fig. 4: Multiple partial payments amounting to the total invoice amount made against an approved invoice — Fig. 5: Multiple partial payments amounting to the invoice total.

Fig. 6: One payment amounting to the invoice total.

Void

You can void an approved or a paid invoice by issuing a credit note equal to the invoice total. If an invoice is already paid then a refund is issued to the customer's source payment method.

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Note
You cannot void a draft invoice. A draft invoice can be deleted.

Life cycle of an invoice